Age of Abundance: The Legal and Political Implications of Crude Oil Exports
The prospect of realizing the full market driven potential of crude oil exports from the US is already confronting a plethora of difficult, though not insurmountable, challenges. Those opposed to any energy development in the United States and advocates against a market based approach to allocating energy resources are conditioning public opinion to treat oil as strictly a domestic resource, different from virtually every other good produced in the United States. Opposition groups - from environmental advocates to certain industrial interests and the national security community - all have clear incentives to prevent US oil exports. Given that export of crude oil already is one of the US’s most regulated export activities, requiring multiple overlapping government approvals and permits, the opposition has many avenues to engage, advocate, and agitate to prevent exports from happening.
Market Fundamentals Support US Crude Oil Exports
The energy production boom, combined with new stringent fuel efficiency and renewable fuel regulations, in the United States has quickly flipped decades-long market fundamentals and is changing the characterization of the US energy picture from one of scarcity to one of surplus. As Mark Mills of the Manhattan Institute put it, “What's obvious now is that the United States is on track to become the world's largest producer of oil. No one would have talked this way 10 years ago ... even three years ago they were wringing their hands because we were going to run out of the stuff."
For crude oil, what once seemed impossible – the US being a significant oil exporter – is already on the cusp of becoming reality due both to increased supply and projected declining demand because of fuel efficiency standards and increased renewable fuel requirements under the Renewable Fuel Standard.